How to Maximize Your Medical College of Wisconsin Benefits

By Jared Andreoli, CFP®, CSLP®

The Medical College of Wisconsin (MCW) has garnered recognition not just for its dedication to healthcare and education, but also for its generous benefits package designed to promote the well-being of its employees. Navigating these benefits can be a complex task due to the sheer breadth and depth of what is on offer. Since benefits can account for over 30% of employees compensation, it’s even more important to thoroughly understand and maximize your options. Let’s go through the key components of MCW’s benefits, so you can be confident you’re getting everything you deserve.

Mandatory 403(b)

At MCW, a mandatory 403(b) plan kicks in after two years of service. Employees are required to contribute 6% of their eligible earnings, which MCW generously matches with an 8% contribution. This process is automatic, simplifying your planning. When you reach two years of service, you need to consider the mandatory 6% contribution in conjunction with what you contributed your first two years of employment in the voluntary 403(b).

Voluntary 403(b)

Immediately upon hiring, employees have the opportunity to contribute to a voluntary 403(b) plan. If you are a high earner, we recommend aiming to max out your 403(b) at $22,500 in 2023, as well as utilize the pre-tax option. While this plan does have a Roth option, we find that the pre-tax option is best for high earners looking to lower their tax bill. Once the mandatory 403(b) takes effect, reevaluate your voluntary 403(b) contribution to see what changes you should make.

457(b)

You will also have access to a 457(b), which allows employees to contribute up to $22,500 in 2023. If you have enough room in your cash flow, it’s generally recommended to max out this plan in addition to the 403(b). One important point to note is that if you ever leave MCW, you need to review if your new employer has a 457(b). If they do, then you can roll over the 457(b) into your new account, assuming your new employer allows rollovers.

Yet if you are retiring or going to a workplace without a 457(b), then you have 60 days of your employment termination to make a decision on how to handle those assets. If you don’t make a decision, then a default distribution will occur on April 1st of the year following termination, and the proceeds will be taxed as ordinary income. This can be an expensive and unnecessary tax bill that could inhibit your ability to retire comfortably, so make sure you plan ahead and don’t procrastinate on this important decision.

Disability Insurance

MCW provides both short-term and long-term disability insurance (known as STDi and LTDi). Unfortunately, there's little room for planning in STDi, as you are simply given 80% of weekly base earnings with a waiting period of 7 days and benefits of up to 180 calendar days.

LTDi coverage offers physicians with 66.67% of monthly earnings, with a max monthly benefit of $15,000, and a waiting period of 180 days. You also have the option to buy additional coverage that would cover 70% of monthly earnings with a cap of $20,000. Since your income is your biggest asset and biggest wealth-generating tool, we typically recommend purchasing this additional coverage.

Health, Dental, & Vision

MCW offers two choices for health, dental, and vision insurance. The Basic plan has higher deductibles and copays, but lower premiums; while the Enhanced plan will have lower deductibles and copays, but a higher premium amount. Depending on your family’s circumstances and medical history, either plan could make sense. 

FSA and Dependent Care FSA

A flexible spending account (FSA) is an account into which you put pre-tax money you use to pay for certain out-of-pocket healthcare costs. FSAs can cover a wide range of expenses, such as deductibles and copayments, as well other expenses. For families, we like these accounts because it can lower your annual tax burden while providing funds for health-related expenses, helping to afford necessary care when needed. The same goes for the dependent care FSA, which is highly beneficial for those with daycare-going children.

Life Insurance

MCW provides life insurance of 1x salary up to $500,000. However, you can also buy additional insurance up to $1,000,000 in coverage. With life insurance being so important to your family if you were to pass away, we recommend analyzing your insurance needs to identify the proper amount of life insurance, as well as address any potential coverage gaps.

Maximize Your Benefits to Increase Your Financial Success

Proactively managing your benefits can have profound impacts on your financial health and ability to reach your financial goals. Whether you are starting work at MCW, or reviewing your options during open enrollment, you owe it to yourself to take advantage of everything you work so hard to obtain.

If you are having trouble making the right decisions, or you aren’t sure how each decision impacts your future financial goals, I’d love to see if I can help. To get started, you can schedule a free consultation, or reach out to us by emailing jared.andreoli@simplicityfinancialllc.com or calling 414-207-6473.

About Jared

Jared Andreoli, CFP®, CSLP®, is president and financial planner at Simplicity Financial, a fee-only RIA dedicated to helping early-career physicians conceptualize their financial picture and achieve their financial goals. Jared specializes in devising individualized financial road maps for clients, and he loves nothing more than a full day meeting with clients who value his partnership to solve problems—big and small.

After college, Jared spent six years working as a mutual fund administrator for a large company. While he learned an immense amount about the financial world, he was missing the personal connection of working with individual clients. Combining his passion for finance and personal connection, he established Simplicity Financial in 2017.

Jared has a degree in finance with a concentration in financial planning from Western Kentucky University, along with the CERTIFIED FINANCIAL PLANNER™ (CFP®) and a Certified Student Loan Planner (CSLP®) certifications. Outside of work Jared enjoys cooking and traveling. He played baseball in college and still coaches occasionally. He and his wife recently welcomed a daughter, who occupies most of their time. To learn more about Jared, connect with him on LinkedIn.